Insurance awareness is not limited to big cities only. Life and health insurance sales in non-metro cities have increased significantly post-Covid-19 as people understand the need for term insurance coverage and accept the fact that hospitalizations are high due to COVID-19 .
According to a report by PolicyX.com, “There has been a 50% growth in health insurance business in non-metro cities in 2020-21. In the same period, the term insurance category saw a 60% growth in non-metro cities. The main reason for this growth is that pre-issue medical checkups are now widely available in smaller cities.
The FY20 Annual Report of the Insurance Regulatory Authority of India (IRDAI) shows that the insurance penetration in India was 3.76% till 2019, which is quite encouraging considering this growth. In 2009 it was 5.20%. The rise of Covid-claims, especially during the second wave, has fueled this trend in non-metro cities.
According to Sanjay Dutta, Chief Underwriting & Claims, ICICI Lombard General Insurance, the company saw a jump in health insurance claims from non-metro cities in the second wave of Kovid-19 as compared to the first wave.
The PolicyX.com report further states that in Lucknow, Jaipur, Indore, Nagpur, Ranchi, Raipur, Mysore and a few other cities, the sale of insurance in the term insurance and health insurance categories has increased by 2 times. Naval Goel, Founder and CEO, PolicyX.com says, “In these markets, people across all age groups have shown confidence in online insurance purchases, with men in the age group of 36-45 being more active in online insurance purchases.”
The adoption of digital is helping in creating better insurance penetration across India. Yashendra Sharma, Employee Benefit-Senior Vice President, Alliance Insurance Brokers, said, “The insurance sale market has witnessed a paradigm shift in the direction of digital adoption of products. The demand for insurance is increasing in both metro and non-metro cities. Although digital adoption has been high in metro cities, but even smaller cities are witnessing growth in these levels due to awareness.”
Sharma says insurance companies have expanded the distribution channel for better reach in metro and non-metro cities. Digital adoption on the underwriting and service front will ensure better reach across India.
Goel said, “Change has to happen, because the days are gone when agents used to sell insurance plans and inform customers about only a few plans. But now with 24×7 internet exposure, even small market customers are well aware of insurance products and their benefits.”
“The wide range and convenience of plans available to the customers through online AI analysis and offline insurance support has assured the small market audiences to rely on the online insurance purchase platform,” he added.